CNN INSIDE POLITICS

Countdown to State of Union Address

Aired January 29, 2002 - 16:00 ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. JUDY WOODRUFF, CNN ANCHOR: I'm Judy Woodruff with our countdown to the State of the Union. I'll interview three big names here in Washington: Andy Card, Dennis Hastert and Joe Lieberman.

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: I'm John King at the White House. One major State of the Union challenge to the president: can he transfer his wartime popularity to an election-year showdown with the Democrats over the economy?

KATE SNOW, CNN CONGRESSIONAL CORRESPONDENT: I'm Kate Snow. Will Capitol Hill be a fortress camp for tonight's big event? I'll have the inside story on security.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: I'm Candy Crowley. What's different now, the man or the mission? A look at the new W.

WOODRUFF: Thanks for joining us. Just hours before President Bush gives what may be his most important speech this year, I was one of a few news anchors who had lunch with Mr. Bush at the White House today. And while we were there, a senior official made it clear that tonight we will see a president whose main focus is still the war on terrorism.

Mr. Bush will single out three nations -- Iraq, Iran and North Korea -- for trying to get weapons of mass destruction, which could help the terrorists. He will also announce change in U.S. foreign policy, to go beyond simply containing terrorism, to promoting the universal values cherished by Americans. Our senior White House correspondent, John King, joins us now with a look ahead.

John, while the president seems prepared to focus on the war overseas, we know that he's also going to be talking about issues here at home. How much, though?

KING: Well, Judy, the president will make the case that all this is connected -- that you cannot win the war overseas and put an end to international terrorism, if you do not protect the American people here at home. So homeland security, the president will propose doubling spending on that. More border security, more harbor security, more help for police and fire departments, intelligence agencies.

The president will say that, yes, that's a domestic war on terrorism, but it is key to the war overseas. Then he will come back to the U.S. economy. He will say September 11th made a recession even worse, and that you cannot pay for homeland security or that war overseas unless you have a strong U.S. economy.

But yet, the primary focus will be an update on the war on terrorism, a look ahead to the potential future fronts ahead. Also, an advisory to the American people that much more needs to be done still in Afghanistan. But the president will connect the dots, if you will, and say that homeland security and strengthening the U.S. economy are critical elements of that war overseas.

WOODRUFF: Well, John, given the political climate, how will Democrats formulate a response? What will they be able to pick at in the speech?

KING: In a word, I think their response will be polite. They will praise the president's stewardship of the war. They will promise to work with him. They will salute a new Bush initiative that will be detailed in the speech, about new volunteerism on the home front, national service and expansion of the Clinton program. Americorps -- the Democrats will praise that. They will say there are some differences over the economy and that they hope to work with the president on that.

Look for it all to be very polite, very brief tonight. These fights will get more partisan further down the road as the November elections approach.

WOODRUFF: John, there are also, we know, at every State of the Union address, VIP guests. What do you know about that, and other elements of what is happening tonight?

KING: An interesting mix of people in the VIP box with first lady Laura Bush tonight. One will be the chairman of the new interim government of Afghanistan, Hamid Karzai. The president will salute his early work. Also, some members of the U.S. Special Forces, the president will salute them and the U.S. military mission. Also, we are told, two American Airlines flight attendants who helped subdue the alleged shoe bomber, Richard Reid. The president will salute their heroism as well, and their role in homeland security, an issue we just discussed.

And one other guest, up near more the domestic political debate, Jimmy Hoffa. He's the president of the International Brotherhood of Teamsters, a man who, on economic matters, usually sides with the Democrats. But he's a big proponent of the Bush energy plan, which of course, is quite controversial, held up right now in the Senate. Mr. Bush will salute Mr. Hoffa as somebody who wants to reach across partisan lines to create jobs.

The big, still-remaining question, will the vice president go? We know he wants to go. There are security concerns about having him in the same building with the president. We are told that call will be made a little bit closer to the speech. Again, Mr. Cheney very much wants to go. They just won't say yet whether he will go.

WOODRUFF: All right, thank you, John.

When President Bush addresses the American people, he will be concentrating on some people more than others. Our senior political analyst, Bill Schneider, is here. Bill, who is the president's target audience today?

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Judy, think of it this way. Eighty-four percent of Americans say that they approve the job the president is doing, but only 44 percent say they're going to vote Republican for Congress. That's a difference of 40 percent. That 40 percent is the target audience that President Bush is aiming at.

WOODRUFF: All right, now, who makes up that 40 percent?

SCHNEIDER: Well, they're mostly moderate Democrats. And you know, about 60 percent of that audience are women. There are women who are concerned about national security, and who applaud the president's performance in the war on terrorism. Women hawks? Well, actually, yes, and that's not an oxymoron.

Because what we found is that since September 11th, women have been more concerned about terrorism than men. And they've looked to the president for reassurance and protection. And so far, they are impressed with President Bush, but not enough to vote for Republicans for Congress. These are voters who are Democrats on the economy, Republicans on the war.

WOODRUFF: So how does the president win over these women hawks, as have newly labeled it?

(LAUGHTER)

SCHNEIDER: Well, he has to turn the economy into a war issue, which is really what he's been doing for the last week in his speeches around the country. He argues that the best way to promote economic growth is to protect the nation's national security. Then Americans are going to feel more confident about spending and traveling and investing. Democrats are trying to pry those issues apart. They're saying we support the president on the war, and we oppose the president on the economy. And president is going to say: You can't do that. You cannot separate the war and the economy. It's one issue, and it's called "security."

WOODRUFF: I'll remember that. Bill Schneider, thanks.

Well, let's talk more about the major themes in the president's speech, or the "keys," as our Ron Brownstein likes to call them. Ron, what are you looking for tonight?

RON BROWNSTEIN, "L.A. TIMES": Well, Judy, I think I'll be looking for four keys. One is, whether the president lays the groundwork for a specific next stage in the war against terrorism. I think what most Americans will be watching the speech for is an update on where we are in the war against terrorism. And I think they'll be looking for what comes next. Now, aides say the speech will be very forward-looking, and one element that you mentioned today is likely to be very prominent -- this idea of focusing on nations developing weapons of mass destruction, that may give some indication of where it goes next.

Second, I think a big question will be to what extent does the president convince the country that he has a persuasive plan for reviving the economy? It's clear he's not going to fall into the trap that his father did, of seeming disconnected from problems at home while prosecuting a war abroad. There's going to be a very strong focus on the economy. The question is whether he has any new ideas to break the impasse with Senate Democrats over how best to revive the economy. So far the indications are that he's going to come forward pretty much with what he had last fall on the table, which the Senate Democrats rejected, and hope that his enormous popularity will give him more leverage to move it forward.

Third, I think a key will be where he reaches out to Democrats. One reason why President Bush is enjoying these enormous popularity ratings at this point is a sense in the country that he has moved almost beyond conventional politics, and become a symbol of national unity. Despite that, as you look across the board, you've got some issues where he's heading towards pointed conflicts with the Democrats, like the energy and the budget. I think he's going to try to balance that by reaching out to them in some new areas -- early childhood education, the community service initiative. And also, by arguing, I think, portraying himself as a peacemaker by arguing that the same cooperative spirit that animates discussion of the war in Washington should be applied to domestic issues.

And finally, I think another question would be, what issues he attaches to the war. His greatest political weapon, at this point, is the ability to portray any of his other goals as indispensable to the war effort. I think you're going to see that on a variety of areas -- energy, defense spending, maybe missile defense. The more he can attach any of his goals to the war, the harder he makes it for the Democrats to oppose them.

WOODRUFF: All right, Ron Brownstein joining us. Thank you, Ron. We'll talk to you tomorrow about how the speech went.

BROWNSTEIN: All right. '

WOODRUFF: Thank you.

Well, certainly Enron has been a story we've been all been watching here in Washington. Just a short time ago, I talked about Enron and about the State of the Union with Senator Joe Lieberman, chairman of the Governmental Affairs Committee, that is investigating Enron's collapse. And I started by asking him if the president's focus tonight on the war on terror is the right approach.

(BEGIN VIDEOTAPE)

SEN. JOE LIEBERMAN (D), CONNECTICUT: We certainly have a lot to be grateful for after the attacks of September 11 against America. We've unified. Our military has performed brilliantly. I think it's important that the president spend part of his speech tonight, at least, talking about the values we're fighting for and what's next. Of course, I hope that they'll say that Saddam Hussein is still on his radar screen, that the war against terrorism won't be over if Saddam is still in power in Iraq.

But I do think that it's critically important for the president to take some of the unity we have in our country, and the confidence and sense of community, and address the critical domestic problems, most particularly, an economy with more than eight million people out of work, and a federal government that's going deep into deficit. We have to solve those problems together.

WOODRUFF: Well, he is going to talk about jobs, Senator. But is that enough, to talk about keeping the focus on jobs?

LIEBERMAN: Well, it is all about jobs, but I guess the question is, what are the details. How are we going to get there? And we really need a meaningful series of proposals from the president that are more than just sort of good feelings. We need a prosperity plan. We need an economic growth and recovery plan. We need a longer-term investment plan. And how we do that in balance with everything, without going deeper into deficit, is going to be a challenge, for the president and for us.

WOODRUFF: Senator, I want to turn you now to Enron, which is getting so much attention these days. The White House, today they were adamant that they were not going to release this information that Vice President Cheney was involved in gathering for his energy task force. In fact, one senior White House official said Mr. Walker at the GAO better get the best damn lawyer he can. So are we inevitably headed to court here?

LIEBERMAN: I believe we're inevitably headed to court. I can't really believe it's happening. I mean, the fact is -- incidentally, with all respect, the White House has been very misleading, at least, about what Mr. Walker, who is an appointee of the Republican leadership of the Congress, is seeking.

He's not asking for memoranda, or topics of discussion in the broadest sense. He's asking for the names of people who came before the vice president's energy task force, and when they came. That's public information. And you know, the more the White House stalls on this, the more people I think are going to ask what do they have to hide. So I'm surprised they're doing this.

WOODRUFF: With all due respect, Senator, they were saying just a couple of hours ago that the GAO request is exactly what it always has been, and he is asking for that information, what was discussed at those meetings.

LIEBERMAN: That's not my understanding from Mr. Walker. I guess ultimately you have to talk to him. He may be asking for a listing of topics. But some of the folks in the White House, whey they're talking, make it sound as if Walker is asking for minutes of meetings and memoranda. He's not, although that would be interesting to me. I think the basic point here is the public's right to know what the government was getting from home, as it formed it's energy policy recommendations, particularly as we look back now with hindsight, after the Enron scandal and collapse has occurred.

WOODRUFF: Senator Joe Lieberman, good to see you.

LIEBERMAN: You too, Judy. See you soon.

WOODRUFF: We appreciate it.

LIEBERMAN: Thank you.

(END VIDEOTAPE)

WOODRUFF: Meantime, over on Capitol Hill, security teams are working to make sure that the most powerful people in Washington, in fact, in the country, will be safe when they gather under the dome tonight. Our Congressional correspondent, Kate Snow, has been looking into the State of the Union security.

(BEGIN VIDEOTAPE)

SNOW: The biggest changes will come after dark. All 1,200 Capitol police officers are on duty, joined by a host of other law enforcement agencies. The human presence reinforces the structural barricades, now ringing the Capitol. Segments of sewer pipe, jersey barriers and metal fencing. Tourists will be cleared out, traffic diverted.

Expect Air Force fighter jets to patrol overhead, and Marine Corps chemical and biological response force to be on standby. And much more, that no one will talk about.

LT. DAN NICHOLS, U.S. CAPITOL POLICE: What makes it heavier security is what you don't see, and what I can't discuss. You know, the people of the nation need to be reassured that we're going to do everything we can to protect everybody in the room.

UNIDENTIFIED MALE: Mr. Speaker, the president of the United States.

SNOW: It is, after all, an important crowd -- all three branches of government in one room, including the entire U.S. Congress. There are no contingency plans for the worst-case scenario, no road map to re-create the U.S. government if the unthinkable happened. There is one small concession to that morbid possibility. Every year, one cabinet member is asked not to attend the State of the Union, just in case. This year is no exception.

UNIDENTIFIED MALE: It was kinds of an inside joke for the people involved. Because it was usually the secretary of veterans' affairs, or the secretary of agriculture. It was just, you drew the short end of stick here.

(END VIDEOTAPE) SNOW: And it's not a joke any more, Judy. One interesting footnote, here. President Bush doesn't actually have to deliver the State of the Union in person. In fact, back in 1801, Thomas Jefferson started a trend by not doing that, by just delivering his State of the Union address as a piece of paper. He didn't come up here and deliver it himself. And that carried through until 1913. So it's only recently that there has been a big crowd on Capitol Hill, this big show.

I asked some of the security officials whether they minded that, whether they thought it might be better if we didn't have this big show, and everyone in one room. And even the security officials, Judy, say the show has to go on. They'll do whatever they can to protect these folks, but they can't stop that from happening -- Judy.

WOODRUFF: Well, I wonder if the television audience has anything to do with it.

SNOW: Probably a little bit.

WOODRUFF: Kate Snow at the Capitol, thank you.

Well, still, many angles of the president's State of the Union address to talk about. Coming up on INSIDE POLITICS, I'll ask White House chief of staff, Andrew Card, for more about what Mr. Bush will say. We'll tell you why some Republicans are buzzing about the personal finances of DNC chairman and Clinton friend, Terry McAuliffe.

And later...

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It's as if the whole bureaucracy is doing a massive dump right on your desk.

(END VIDEO CLIP)

WOODRUFF: They have headaches Rob Lowe's character on "The West Wing" never dreamed of. Presidential speechwriters sound off about the State of the Union challenges.

(COMMERCIAL BREAK)

WOODRUFF: In just a moment, White House chief of staff Andrew Card will go on the record about President Bush's State of the Union address. But first, when Mr. Bush makes his big entrance tonight, many Americans will see him in a different light than they did a year ago, or even five months ago. Our senior political correspondent, Candy Crowley, looks at the evolution of the president's image.

(BEGIN VIDEOTAPE)

CROWLEY: The news came that morning inside a Florida classroom: American is under attack. It was the whisper that changed a presidency.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: In our grief and anger, we have found our mission and our moment.

CROWLEY: But friends and political rivals say this is not a different president, but different circumstances that played to his strengths.

WILLIAM BENNETT, EMPOWER AMERICA: Same man, stronger, more focused, clearer. Now, obviously, with a sense of a mission. He now knows what he's there for.

CROWLEY: Even if he has not changed, it is clear in polls and conversations that people see him differently. Heck, they even see the past differently.

BOB KERREY, FORMER SENATOR: He rose to the occasion, no question. His decision to select Cheney as vice president now looks like one of the most brilliant moves that any politician ever made. It was very risky at the time.

CROWLEY: The president's perceived success in conducting the war seems to have given him a confidence that permeates his body language and his photo-ops. Can this man, answering questions last February...

BUSH: When the -- our people with whom we have -- with whom we conduct our affairs...

CROWLEY: ... be the same president that answered questions yesterday?

BUSH: We're going to help Afghanistan develop her own military.

CROWLEY: Before September 11th, said one Bush watcher, he seemed scattered. There wasn't a host of issues he had much passion for. But now he's thoroughly engaged. Not that he still doesn't have adventures in linguistics.

BUSH: I think they misunderestimated the will and determination of the commander-in-chief.

CROWLEY: In some of America's living rooms, that now seems less worrisome, than endearing. Or perhaps it just matters less, because so much more is at stake.

UNIDENTIFIED MALE: I tend, for one, when I'm watching him speak, to be less aware and care less about words that he stumbles upon, or about him using words that I think are a little bit yokey. I don't really care. I'm listening more now for the substance of what he is saying.

(END VIDEOTAPE)

CROWLEY: Even as the war on terrorism emphasizes his strengths, it also minimizes his weakness. There is, after all, little room for nuance in a war that President Bush sees absolutely as a titanic struggle between good and evil -- Judy.

WOODRUFF: Thanks, Candy. We'll see you tonight, as we cover the State of the Union.

Well, one man who's been at the president's side since day one is his chief of staff, Andrew Card. He joins me now from the White House. Andy Card, as I talk to you, we're going to show some pictures of the president working on the State of the Union address. We know he's been spending some time on it.

I want to ask you the focus, if senior administration officials today saying most of the speech is on the war on terror. And yet, a new poll today in "The Washington Post" showing 70 percent of Americans, if not more, worried about the economy. Should the president be spending more time on that subject of concern?

ANDREW CARD, WHITE HOUSE CHIEF OF STAFF: Well, you're going to find that he'll be spending a lot of time talking about the priorities for America. And those priorities are, winning the war, securing the homeland, and generating economic security, which means jobs. So he will spend a lot of time on the challenge of creating good jobs in the United States.

WOODRUFF: But my question is, is he spending enough? We know the bulk of the speech tonight is on the war on terrorism. Is that enough? Is that going to be reassuring enough to the public, to spend more on war on terror, less on the economy?

CARD: Wait until you hear the speech. This is a very good speech, and president does demonstrate the top priorities. And the top priorities are winning the war -- and you expect him to talk about winning the war. Another priority is securing the homeland, and he'll do everything he can to make sure our homeland is secure. But yes, he recognizes that we need economic security. And that means that we have to create opportunities for jobs.

So he'll talk about how good jobs are so important. And in order to get a good job, you have to have a good education. You have to have an employer that will hire you, which means you have to have people who are out there to willing to generate more opportunities for employment. He'll talk a lot about jobs.

WOODRUFF: That same poll in "The Washington Post" today, Andy Card, said 75 percent of Americans believe there should be a full- scale investigation of Enron. My question is, how can that happen when the White House is not turning over those documents, with regard to the vice president's energy task force?

CARD: Well, first of all, there is a criminal investigation ongoing by the Justice Department over Enron. And that will be a very aggressive investigation, and I have great confidence that the Department of Justice will do its job, independent of any influence that might come from anyone. They'll do a good job of the criminal investigation.

At the same time, the president has called upon Secretary O'Neill, Secretary Chow and Secretary Evans, to take a look at 401(k) and pension plan programs that the federal government administers and oversees, to see what we can do to protect those plans, and those people who invested in those plans. So I think there's a lot going on.

And with regards to the investigations that Congress is conducting, we'll be cooperating with those investigations, but we also have the important responsibility of protecting the ability of the president and the vice president, to get unfettered advice and counsel on important matters so that they can make good, sound recommendations to the American people. The good news is the recommendations are very public, and they show up.

WOODRUFF: But Mr. David Walker, who's the head -- involved with the General Accounting Office, which is, as you know, an arm of the Congress, is saying that if what the White House is they're going to go and create a task force, and I'm quoting here: "... detail people from different agencies, outreach to whomever you want and then circumvent Congressional oversight, that's a loophole big enough to drive a truck through."

CARD: Well, Mr. Walker is wrong. And this president and this vice president have the highest ethical standards, and they're conducting their business very well. And I want the president and vice president to be able to have the information that they need to make good, sound policy. And it's not just about this president and this vice president. It's for all future presidents and vice presidents.

So this is a very important principle, and we are working very well with the people who are investigating the Enron situation and others. But this is around the energy plan that was presented to Congress. It was 177-page report with 105 recommendations. That report and those recommendations have been well-known for a long time. They're in the public domain. They've been well- debated. And that's what this report was all about, was presenting an energy plan for America.

WOODRUFF: One other thing, Andy Card. Yesterday on this program, your colleague at the White House, Karen Hughes, counselor to the president, said when we were talking about Enron, she said, "where were the federal regulators back in -- when these accounting practices were occurring at Enron?" She pointed a finger at the Clinton administration.

In response to that, a Clinton adviser, Paul Begala said, and again, I'm quoting: "The Clinton administration tried time and again to enact legislation to protect the public from this kind of greed, and they were blocked at every turn by Congressional Republicans." Is there fault on both sides here?

CARD: Well, first of all, let's find out the facts. And the facts are that this president has called for a criminal investigation of the Justice Department -- that's ongoing. He's also called for a complete review of 401(k) and pension plans that, in regulations that they're ruled by, to see what we can do to tighten up the protections for those people who make investments in those important retirement instruments.

So, that's what's going on. And the good news is, this is a business scandal, and we're going to understand more about how business has let the American people down, and what we can do to protect people who work for companies and invest in companies. And that's what we will be doing.

WOODRUFF: All right, Andy Card, the president's chief of staff joining on this State of the Union day, thank you very much.

CARD: Thank you, Judy. Look forward to tonight's speech.

WOODRUFF: It's good to see you. We look forward as well.

Checking the headlines in our "Campaign News Daily": Democrats in California and Florida are sending out invites to the first of so- called cattle calls for the 2004 election. Democrats considering a White House run are being invited to meet the party faithful next month in Los Angeles and this April in Orlando.

Also, in California, new polls show Richard Riordan is making a strong run for the governor's office. In both an "L.A. Times" poll and a Field Poll, the former Los Angeles mayor has a sizable advantage over opponents Bill Simon and Bill Jones in the Republican race. In a head-to-head match-up with Democrat incumbent Gray Davis, the "L.A. Times" has Riordan and Davis in a dead heat. The Field Poll of likely voters gives Riordan a seven-point edge over Davis.

Well, the "Inside Buzz" on another big bankruptcy and the company's links to DNC chairman Terry McAuliffe. Also ahead: House Speaker Dennis Hastert joins me with his views on tonight's speech and the president's agenda in the House.

(COMMERCIAL BREAK)

WOODRUFF: Some Republicans are buzzing this day about money, including profits made by none other than the chairman of the Democratic National Committee.

Our congressional correspondent Jonathan Karl has the inside story.

Jon, tell us about it.

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Well, it's about Democratic Chairman Terry McAuliffe, who made a windfall in the stock market that makes all that money that Hillary Clinton made trading commodity futures look like small potatoes.

McAuliffe was an original investor in a the company Global Crossings, a fiber-optics company. Back in 1997, he invested $100,000. By the time he sold most of his shares two years later, his profit, according to the DNC, was approximately $18 million. This comes to light today because Global Crossings has now declared bankruptcy and its once mighty stock is now selling for just pennies.

And, you know, fortunately for McAuliffe, he sold most of his shares before the company imploded. Republicans, though, are privately gleeful about this, saying it will make it harder for McAuliffe to criticize Republicans about Enron. A McAuliffe spokeswoman over at the DNC said that is nonsense. And she said -- quote -- "Terry was an initial investor. He bought low and he sold high and was fortunate enough to make a lot of money. He bought and sold stock. He was not a paid adviser to the company."

And the DNC also points out that Global Crossings was a company that had very strong Republican ties and that another big stockholder was a former president, Judy, by the name of George Bush.

WOODRUFF: Jonathan, separately, I understand that Vice President Cheney has been up on the Hill lobbying having to do with the scope of the September 11 investigations?

KARL: Well, that's right. A number of congressional committees are gearing up for possible investigations into what went wrong on September 11, how America could have been caught by surprise.

And Cheney has had a series of conversations with members of Congress up here, including the Democratic leader, Tom Daschle. And Daschle says that Cheney made the request that the Congress limit the investigations to strictly the Intelligence Committee, where most of the investigations will be closed and not open to the public. And Cheney does not want to see a broader board of inquiry, having intelligence people be brought up here.

Daschle told reporters, however, that he has not agreed to limit the scope and he doesn't know where it is going to go. We don't know if there will be more investigations. There will certainly be the Intelligence Committee. And it's also a point, by the way, that president himself made at breakfast this morning with Daschle.

WOODRUFF: All right, Jon Karl at the Capitol, thanks very much.

Well, let's talk about now the budget, political battles and the State of the Union with the speaker of the House of Representative. Dennis Hastert joins us from Capitol Hill.

Mr. Speaker, thank you for being with us.

REP. DENNIS HASTERT (R-IL), SPEAKER OF THE HOUSE: Good evening.

WOODRUFF: Are you comfortable, Mr. Speaker, with the fact that this president is going to be submitting a budget in the next few days that shows the country moving back into deficit, significant deficit?

HASTERT: Well, I think we are in an unusual time.

First of all, we are in a war. Our own homeland defense is in question. And we are trying to build that up. And we are trying to dig ourselves out of recession. We have been in a recession over a year now -- trying to get us back a track, with the whole thing being emphasized by September 11 of this year.

So I think the president's budget is what we have to do build ourselves back into a time of surplus. And I think if you wall off the cost of the war, wall off our homeland security, and look at what we are doing to try to restore jobs to American people, I think we will be in surplus very, very soon.

WOODRUFF: Well, having said that, what, then, are you telling your conservative colleagues in the House, who, it has now been reported, are arguing that you and other Republican leaders should not go along with this?

And I want to quote one of the House members from Pennsylvania, Pat Toomey, who said -- quote -- "There is a lot of political appeal to supporting a balanced budget. A lot of members ran on that basis. They have based their credibility on an ability to deliver a balanced budget.

And we are also told the House Republican whip, Tom DeLay, agreed with that thinking.

HASTERT: Well, we are going to work with the whip and we are going to work with our Republican majority. We have to try to find a good budget that we can work with and live with. And I'm not saying it's going to be X numbers or X-plus or X-minus. We are going to get a budget we can pass that will meet the needs of the American people, that will help our military, that will help get us out of this recession so that we can get America back to work.

WOODRUFF: So his comment that a lot of members ran on the ability to deliver a balanced budget, do you agree with that?

HASTERT: Well, I think a lot of us did. I ran on an ability to get a balanced budget. And we did for three years, since I have been speaker. But we have an extraordinary time. We are going to try to stay balanced, if we can. We will wall off some of these costs. But we have to go through the process, quite frankly.

WOODRUFF: Mr. Speaker, on Enron, you said earlier today that the president is right. You agree with his decision not to release those documents that were part of Vice President Cheney's task force. But the GAO is insisting still that all they are looking for are dates of meetings, locations, who was there, and the topic discussed. Is that really too much to turn over?

HASTERT: Yes, I served in Mrs. Clinton's task force on health care. I never got invited to the meetings or I never got to see anybody they talked to. And I was a member. We never got to see any of that. So there are some presidential rights that are involved in this thing.

What I'm saying is, right now, Enron is a business issue. It's a business that failed because they made bad decisions and they put a lot of people in jeopardy. They put a lot of their employees in jeopardy. We need to look at it as a business decision. We need to make sure that there's protections for people who were harmed, lost their pensions, lost their savings.

And I think you will find some who would like to make this a political issue. As a matter of fact, I saw a circular today from some Democrats who said they want to turn up the volume on Enron because they desperately need an issue out there. And I think that is what you will see.

WOODRUFF: Well, your chairman, your Republican chairman of the House Energy Committee told me in an interview just the other day, he said: If they had asked my advice early on, I would have said of course share that with whoever wants to see it.

HASTERT: Well, I think there is a lot of advice going on right now.

WOODRUFF: But you don't agree with his view on this...

HASTERT: No.

WOODRUFF: ... and that it's mistake just to say who was at a meeting and where it came from?

HASTERT: Well, I mean, it's a fact that if a member of Congress -- if you play this out, a member of Congress would go down to talk with the president about an issue that he thought very important and he wanted -- all of the sudden, that would become public information. I think that there are some confidentiality and some things that we ought to have honest, candid discussions and not always be public.

WOODRUFF: All right, well, Mr. Speaker, we thank you again for joining us.

HASTERT: My pleasure. Thank you.

WOODRUFF: It's good to see you. Thank you.

The State of the Union, as you might expect, has a long history, but it has not always been the prime-time event that it is today.

Our senior analyst Jeff Greenfield has more on the speech, on its modest beginnings and its expanded role through the years.

JEFF GREENFIELD, CNN SR. ANALYST: From Teddy Roosevelt's bully pulpit, to FDR's fireside chats, to Ronald Reagan as the great communicator, to tonight's State of the Union spectacle, this has been a 100-year journey on a path toward ever-more grandiose presidential speech.

You know what's odd about this? For the first 100 years or so of our national life, the whole idea of a president actually speaking politically to Americans was considered downright un-American.

(BEGIN VIDEOTAPE)

(voice-over): The founding fathers seemed to think so. The very first Federalist Paper warned that most of liberty's enemies -- quote -- "have begun their careers by paying obsequious court to the people, commencing demagogues, and ending tyrants." That may be one reason why President Thomas Jefferson refused to deliver a State of the Union speech in person, too much like the British sovereign opening Parliament, and instead sent a written message, a tradition that lasted more than a century. When Stephen Douglas ran against Abe Lincoln in 1860 and went on a speech-making campaign, one critic charged he was acting -- quote -- "as a tin man peddling his wares." And when Andrew Johnson was impeached in 1868, one of the counts charged that he had gone before the public and -- quote -- "uttered loud threats and bitter menaces as well against Congress" -- unquote.

But when the youthful, energetic Theodore Roosevelt assumed the presidency at the dawn of a new 20th century, the combination of Roosevelt's personality and modern communications proved irresistible. And his successor, Woodrow Wilson, broke with precedent in 1913 and went to the Congress to sell his legislative program. We've never looked back.

(END VIDEOTAPE)

GREENFIELD: And now platoons of speechwriters shape the words and operatives shape the images. And a president who can't communicate effectively is doomed to fail. And if you think this is not a made-for-television special tonight, remember, until 1965, the State of the Union speech was a daytime event.

You think the larger nighttime audience had anything to do with the change, Judy?

WOODRUFF: No, I don't think it had anything to do with the change, Jeff.

Jeff, what is on "GREENFIELD AT LARGE" tonight, more importantly?

GREENFIELD: Actually, you are and Aaron and myself. We are being preempted by a fellow named George W. Bush. And so I will be with you folks on Capitol Hill tonight looking at the speech.

WOODRUFF: I can't wait. In fact, you are right downstairs here in Washington.

GREENFIELD: See you later.

WOODRUFF: The art of crafting a presidential address: Speechwriters share the tools of their trade just ahead. Plus, reaction from Florida Governor Jeb Bush after word of his daughter's arrest.

(COMMERCIAL BREAK)

WOODRUFF: Checking the items in our "Newscycle" this hour: The daughter of Florida Governor Jeb Bush was arrested overnight. Police say she tried to fill a false prescription. Noelle Bush is 24. She is accused of trying to obtain Xanax, a sedative used to treat anxiety disorders. Earlier, Governor Bush issued a statement which reads: "This is a very serious problem. Unfortunately, substance abuse is an issue confronting many families across our nation. We ask the public and the media to respect our family's privacy during this difficult time so that we can help our daughter. In Las Vegas, boxer Mike Tyson testifies this afternoon before the Nevada Athletic Commission in hopes of receiving a license to fight Lennox Lewis for the heavyweight title. Tyson was involved in a scuffle with Lewis last week at a news conference.

And we are just four hours away from tonight's State of the Union address. In his remarks on fighting terrorism, the president is expected to single out Iran, Iraq and North Korea as nations that have tried to get weapons of mass destruction.

Well, it is no secret that presidents don't write their own speeches,, especially speeches as long and detailed and important as the State of the Union.

Our senior political analyst Bill Schneider joins me now with more on the largely-unseen people behind these very most memorable words -- Bill.

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: That's right.

State of the Union is a very big day for presidential speechwriters. Only, we are not supposed to notice them because they have a passion for anonymity. Well, we found some former White House speechwriters who came out of the shadows.

(BEGIN VIDEOTAPE)

(voice-over): Here's David Kusnet, speechwriter for President Bill Clinton, citing his most notable contribution.

DAVID KUSNET, FORMER CLINTON SPEECHWRITER: That there is nothing wrong with America...

(BEGIN VIDEO CLIP)

WILLIAM J. CLINTON, PRESIDENT OF THE UNITED STATES: ... that cannot be cured by what is right with America.

(END VIDEO CLIP)

SCHNEIDER: Here is Josh Gilder, speechwriter for Ronald Reagan. His most memorable line?

JOSH GILDER, FORMER REAGAN SPEECHWRITER: I guess the one sentence was, "Go ahead..."

(BEGIN VIDEO CLIP)

RONALD REAGAN, PRESIDENT OF THE UNITED STATES: Make my day.

(END VIDEO CLIP)

SCHNEIDER: And Mary Kate Cary, who wrote speeches for the first President Bush, including the one for the 50 anniversary of Pearl Harbor Day.

MARY KATE CARY, FORMER BUSH SPEECHWRITER: The enemy, in World War II, mistook...

(BEGIN VIDEO CLIP)

GEORGE H.W. BUSH, PRESIDENT OF THE UNITED STATES: Our diversity, our nation's diversity, for weakness.

(END VIDEO CLIP)

SCHNEIDER: Ah, the life of a White House speechwriter.

CARY: Every speechwriter's dream would be to have that job that Rob Lowe seems to have.

SCHNEIDER: But the reality inside is...

CARY: It's a little different. It's a much more humble profession.

SCHNEIDER: Just think about all the information you have to go through to write a State of the Union speech.

GILDER: It's the kitchen-sink syndrome. It's as if the whole bureaucracy is doing a massive core dump right on your desk.

SCHNEIDER: You have to boil it all down to a grabber line that gets quoted in all the news broadcasts. Any suggestions for President Bush's speech?

KUSNET: It's the end of beginning and not the beginning of the end in the war against terrorism.

CARY: The state of the union is strong, but the state of our union has changed.

GILDER: Supply-side tax cut.

SCHNEIDER: And try not to give the president anything embarrassing to say, like the line that somehow got into the early draft of a speech that the first President Bush was giving in which he talked about busting drug cartels.

CARY: And big busts are not enough.

(END VIDEOTAPE)

SCHNEIDER: Can't top that.

Well, all the speechwriters agreed on one point: The president should never sound defensive. In the State of the Union speech, he must set the agenda.

WOODRUFF: You are right. We can't top that.

SCHNEIDER: Can't top it.

(LAUGHTER) WOODRUFF: Bill Schneider, we'll see you later.

Well, after all the effort to craft a State of the Union address, is the president's speech that important?

(BEGIN VIDEO CLIP)

DAVID BRODER, "WASHINGTON POST": It's the chance for him to really kind of grab the country by the lapels and say: Here what's I have in mind.

(END VIDEO CLIP)

WOODRUFF: But how tough is it to really grab a State of the Union audience? That story when we return.

(COMMERCIAL BREAK)

WOODRUFF: Question: Is the State of the Union as big a deal as the White House and the news media make it out to be?

Here is our national correspondent Bruce Morton.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN CORRESPONDENT (voice-over): It's an occasion. When else does even a president get two standing ovations? When the doorkeeper announces you...

UNIDENTIFIED MALE: The president of the United States!

MORTON: And again when the speaker introduces you.

HASTERT: ... the president of the United States.

(APPLAUSE)

MORTON: But do they matter? Who are they aimed at? When Steve Hess wrote State of the Union speeches for Dwight Eisenhower, it was the Congress.

STEPHEN HESS, BROOKINGS INSTITUTION: And over their shoulder, you were aiming it at the employees of the federal government, the people who work for you. It was a message that was put together to tell them what you wanted to do in the next year. And that was very important.

And, of course, television means a president speaks to the voters, too.

BRODER: It's the chance for him to really kind of grab the country by the lapels and say: Here's what I have in mind and here is what I hope you will pay attention to.

MORTON: But it's easier not to watch now than it used to be. In 1994, the average household got 40 TV channels -- now 73, not all carrying the speech.

Still, last week "Friends," the top-rated show, reached, the Nielsen people say, 29 million people; "West Wing" 19 million. President Bush's debut speech to Congress last year, not officially labeled a State of the Union, got lots more, almost 40 million, though that's far behind Super Bowl 2000's 88 million. And the speeches are not always memorable.

ROBERT DALLEK, HISTORIAN: By and large, they are not nearly as important as they're thought to be at the moment they are being given and promoted in the press, so to speak.

MORTON: Still, it is an occasion: the executive reporting to the legislature and the country.

HESS: I think there's a ceremonial part, a symbolic part that's awfully important as well that goes beyond how good a speech it is.

MORTON: And this year, because of September 11, the voters may be in a mood to watch and listen.

BRODER: They rediscovered after September 11 that government can be important to them. And so I expect the president will have a large and attentive audience this year.

MORTON: The bully pulpit, the president's chance to say: Here's where I want to take us. Please follow me.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

WOODRUFF: In about three hours from now, this gentleman sitting next to me, Aaron Brown, will be joining me over at the Capitol. We will be talking about the State of the Union with our colleague Jeff Greenfield.

Aaron, just to underline what Bruce Morton just said, this speech does matter. There is a war on terror. The economy is in question. People want leadership.

AARON BROWN, "NEWSNIGHT": It's not a simple question this time: What is the state of the Union? And at some point, we can all sit around, as we do, and talk about it and speculate upon it. But then you just have to sit back and hear not only the words the president speaks, but how he says them. And both will be very important. I'm excited for the speech tonight. I'm looking forward to that part of the evening; 8:00, our coverage begins. We hope you will join us.

WOODRUFF: And we do. And we'll be parsing it, but we'll be also listening to this message overall -- Aaron Brown joining me tonight at 8:00.